People seeking asset protection continuously underestimate the intelligence and powers of their creditors, especially government creditors.. A case in point is a client who consulted with me in March about potential lawsuits by private individuals and one or more government agencies seeking civil remedies. My advise was that the particular creditors, and particularly the government agencies, would within a week or two attempt to freeze all their bank accounts, deposits with attorneys, credit cards and any other means of financial support and legal defense. I suggested making sure enough cash was set aside in a safe place to pay his litigation attorneys and to pay living expenses. Thereafter, the client consulted a tall-building law firm which advised the client that if certain steps were taken the creditors would have no right to freeze assets prior to a lawsuit and judgement. Guess what happened.
Four weeks later all of the client’s assets were frozen by the government agency seeking civil- not criminal- damages. The client was not accused of any criminal act, only a civil violation, yet all his means of support and legal defense were taken away without notice pursuant to a temporary injunction. The lesson to be learned- it seems a hard lesson to teach- is that whenever there is the slightest hint that an agency of any government is considering bringing a civil action the people involved should take immediate steps to provide financially for their subsequent legal defense and for their living expenses for an extended period. Government creditors are not slow, incompetent, or companionate, and they have unlimited legal resources. Do not underestimate your foes.